Jacobs Solutions (US:J)2022-07-31 16:00Financial Performance - Revenues for Q3 2022 were $3.83 billion, an increase of $250.7 million, or 7.0%, from $3.58 billion in Q3 2021 [215]. - For the nine months ended July 1, 2022, revenues were $11.04 billion, an increase of $535.6 million, or 5.1%, from $10.51 billion in the same period last year [215]. - Gross profit for Q3 2022 was $824.5 million, an increase of $7.5 million, or 0.9%, from $816.9 million in Q3 2021 [217]. - Gross profit for the nine months ended July 1, 2022 was $2.49 billion, an increase of $275.4 million, or 12.4%, from $2.22 billion in the same period last year [217]. - Operating profit for Q3 2022 was $265.8 million, consistent with $263.7 million in Q3 2021 [210]. - Net earnings attributable to the Company from continuing operations for Q3 2022 were $196.3 million, or $1.52 per diluted share, an increase of $30.9 million from $165.4 million, or $0.82 per diluted share in Q3 2021 [210]. - For the nine months ended July 1, 2022, net earnings from continuing operations were $419.4 million, or $3.23 per diluted share, compared to $422.2 million, or $2.78 per diluted share in the same period last year [211]. - SG&A expenses for Q3 2022 were $558.7 million, an increase of $5.5 million, or 1.0%, from $553.2 million in Q3 2021 [219]. - The Company experienced unfavorable impacts from foreign currency translation of $130.1 million and $176.8 million for Q3 and nine months ended July 1, 2022, respectively [215]. - Net interest expense for the three and nine months ended July 1, 2022, was $25.1 million and $64.6 million, respectively, an increase of $6.1 million and $14.6 million from the prior year periods [221]. - Miscellaneous income (expense), net for the three and nine months ended July 1, 2022, was $31.4 million and $51.8 million, respectively, a decrease of $7.2 million and $86.9 million from the prior year periods [222]. - Effective tax rates from continuing operations for the three months ended July 1, 2022, was 21.9%, down from 38.5% in the prior year [223]. Business Segments - Critical Mission Solutions segment revenues for the three months ended July 1, 2022, were $1.32 billion, an increase of $99.0 million or 8.1% from the prior year [232]. - People & Places Solutions segment revenues for the three months ended July 1, 2022, were $2.23 billion, an increase of $129.9 million or 6.2% from the prior year [234]. - PA Consulting segment revenues for the three months ended July 1, 2022, were $277.6 million, an increase of $21.8 million or 8.5% from the prior year [237]. - Operating profit for the Critical Mission Solutions segment for the three months ended July 1, 2022, was $104.3 million, a slight decrease of $3.8 million or (3.5)% from the prior year [233]. - Operating profit for the People & Places Solutions segment for the nine months ended July 1, 2022, was $592.9 million, a decrease of $10.8 million or (1.8)% from the prior year [235]. - Operating profit for the segment for the three months ended July 1, 2022, was $51.4 million, a decrease of 9.4% from $56.8 million for the corresponding period last year [238]. Strategic Initiatives - The company plans to create a new holding company, Jacobs Solutions Inc., in the fourth quarter of fiscal 2022, aligning its public identity with a global technology-forward solutions company [196]. - Jacobs invested in a 65% stake in PA Consulting, which employs approximately 3,300 people and operates across seven sectors, enhancing the company's innovation and transformation capabilities [205]. - The Company acquired StreetLight Data, Inc. on February 4, 2022, and BlackLynx on November 19, 2021, contributing to revenue growth [213]. - The Company’s Board of Directors authorized a share repurchase program of up to $1.0 billion, with approximately $664.6 million remaining as of the third quarter of fiscal 2022 [281]. - During the third quarter of fiscal 2022, the Company repurchased a total of 1,459,115 shares at an average price of $138.87 per share [281]. Operational Challenges - The impacts of the COVID-19 pandemic continue to affect operating results, with significant uncertainty regarding future customer demand and supply chain disruptions [192]. - The company has developed contingency plans to address potential further deterioration of the COVID-19 situation, ensuring the health and safety of employees and clients [191]. - The company temporarily reduced spending broadly during the pandemic, focusing only on critical operating and capital expenditures [191]. - The company continues to monitor the economic impacts of inflation and actions taken by monetary authorities in response to these conditions [188]. - The company emphasizes the importance of retaining key personnel and hiring additional employees to support its operations [191]. Financial Position - The total backlog as of July 1, 2022, was $28.09 billion, an increase of 10.4% from $25.44 billion as of July 2, 2021 [246]. - Cash and cash equivalents at July 1, 2022, were $1.10 billion, an increase of $88.0 million from $1.01 billion at October 1, 2021 [250]. - Net cash flow provided by operations for the nine months ended July 1, 2022, was $197.2 million, a decrease of 62.4% compared to $523.6 million for the corresponding prior year period [252]. - Net cash used for investing activities for the nine months ended July 1, 2022, was $491.2 million, a significant decrease from $1.72 billion in the corresponding prior year period [253]. - The Company had approximately $220.5 million in cash and cash equivalents held in the U.S. and $881.8 million held outside of the U.S. as of July 1, 2022 [255]. - The Company had $286.9 million in letters of credit outstanding at July 1, 2022 [256]. - If floating interest rates had increased by 1.00%, the interest expense for the nine months ended July 1, 2022 would have increased by approximately $16.4 million [269]. - The Company has $186.1 million in notional value of exchange rate sensitive instruments as of July 1, 2022 [270]. Compliance and Governance - The Company evaluated the effectiveness of its disclosure controls and procedures as of July 1, 2022, concluding they were effective for timely reporting as required by the SEC [273]. - There were no changes to the internal control over financial reporting that materially affected or are likely to materially affect the Company's internal control during the quarter ended July 1, 2022 [274]. - The Company did not have any sales of unregistered securities during the third fiscal quarter of 2022 [278]. - The Company issued 6,620 shares of restricted stock in connection with the acquisition of Streetlight, subject to lockup restrictions [279]. - The Company has not defaulted upon any senior securities [282]. - There were no legal proceedings reported that materially affect the Company's financial condition [276]. - The Company has not identified any material changes to risk factors that could affect its business or financial condition [277]. - The Company’s management is committed to ensuring compliance with the Securities Exchange Act of 1934 and related regulations [273].